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    Richmond AMERICAS MarketBeat Industrial 2page Q12013

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    Housing starts in I Virginia increa ased 8.9% in Janu uary from Decem mber 2012. The number of pr rospects in the t for 5,000 to 25 market 5,000 sf is signifi icant. A dip in vacancy rates is expected in the second and third quarters.

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    Richmond AMERICAS MarketBeat Industrial 2page Q12013

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    Housing starts in I Virginia increa ased 8.9% in Janu uary from Decem mber 2012. The number of pr rospects in the t for 5,000 to 25 market 5,000 sf is signifi icant. A dip in vacancy rates is expected in the second and third quarters.

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    Housing starts in I Virginia increa ased 8.9% in Janu uary from Decem mber 2012. The number of pr rospects in the t for 5,000 to 25 market 5,000 sf is signifi icant. A dip in vacancy rates is expected in the second and third quarters.

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    104 views2 pages

    Richmond AMERICAS MarketBeat Industrial 2page Q12013

    Uploaded by

    Anonymous Feglbx5
    Housing starts in I Virginia increa ased 8.9% in Janu uary from Decem mber 2012. The number of pr rospects in the t for 5,000 to 25 market 5,000 sf is signifi icant. A dip in vacancy rates is expected in the second and third quarters.

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    MARKETBE EAT

    INDUSTR RIAL SN NAPSHO OT


    RIC CHMOND D, VA
    A Cu ushman & Wak kefield Alliance e Research Pub blication

    Q1 2013

    ECONOMIC OVERVIEW
    The economic picture in Virgin nia is improving slowly, with un nemployment ho olding steady and d housing starts rebounding to the highest level in four years. The T Virginia unem mployment rate was 5.6% in Jan nuary, unchanged d from Decem mber and down from 6% in Janu uary 2012; the Richmond regions rate w was 6.6%, down from f 7.0% in Jan nuary 2012 and 7.7% 7 in January 2011. Housing starts in i Virginia increa ased 8.9% in Janu uary from Decem mber 2012 and 44.7% 4 over the year. y Although new n homes repres sent only a fraction of the housing market, each h home built create es an average of three jobs for a year half of those t in the constr ruction industry and generate es about $90,000 in tax revenue e. Also o of note, First Pot tomac Realty Tr rust is marketing g its 4.2 millionsquare e-foot (msf) port tfolio of industrial properties in southern Virginia, including mor re than 700,000 square feet (sf) at Rivers Bend, , at Rou ute 10 and Interstate 295 in Che ester. The six warehouses and flex industrial space si it on 150 acres and a are 100% lea ased.

    OUTL LOOK
    Activit ty is trending up, brokers say. The number of pr rospects in the t for 5,000 to 25 market 5,000 sf is signifi icant, and broke ers anticipate tha at pickup p will translate in nto activity in the second and th hird quarters. Absorp ption is still positive but not sign nificant, with a d dip in vacancy rates a anticipated in the e second and third quarters. A f former hydroe electric power p plant, built in 189 99 in downtown n Richmond, is on the e market for $3.5 5 million. It could join several m major industrial proper rties along both sides of the Jam mes River that ar re being conver rted into residen ntial/office/retail l development, w which would tak ke a vacan nt space off the market. STAT TS ON THE G O
    Q1 2012 2 Overa all Vacancy Direct t Asking Rents (ps f/yr) YTD L Leasing Activity (sf f) 10.7% % $4.24 4 462,556 6 Q1 2013 9.9% $4.15 450,320 Y-O-Y 12 MONTH H CHANGE FORECAST T -0.8pp -2.1% -2.6%

    LEASING AND SAL LES ACTIVITY Y


    Bermu uda Distribution n, a transportatio on company, leas sed 92,857 sf at 4810 E Eubank Road in Richmond. Best t Bully Sticks, wh hich manuf factures dog trea ats and distribut tes other pet pro oducts, leased 90,000 0 sf at Eastport near n Richmond International Air rport, moving from i its much smaller r warehouse nea ar Virginia Union n University. And d ITAC, which provides s engineering and d construction services, s expanded into 45,000 sf on Enon Chu urch Road in Chester. Const truction on the Vitamin V Shoppes 311,000-sf warehouse in Ashlan nd, which will be e used as the companys East Co oast flagship center r, is well under way, w with hiring expected to sta art this spring. Notab ble sales included d the former Bin nswanger Glass Company 50,528 8 sf on Jacque St treet in Richmon nd to K2 Trop phies & Awards for $1.2 million, or $24 per square fo oot (psf), and a former f U.S. Postal Service building g in Sandston to Swift Air Logist tics. The Virginia abased trucking compa any paid $1.45 million, m or $24 ps sf, for the 61,500 0-sf building. Absor rption was 140,150 sf in the first t quarter, down from 317,846 sf f for the e first quarter of 2012. Leasing activity a was 450, ,320 sf, on par with fi irst quarter 2012. Vacancy was 9.9%, 9 compared d with 10.7 % in the same quarter of 2012 2 and 11.1% in i 2011. Prices remain r very compe etitive for tenant ts and prospecti ive buyers. OVER RALL RENTAL L VS. VACANC CY RATES
    $4.50 $4.40 psf/yr $4.30 $4.20 $4.10 $4.00 2009 2010 201 11 2012 2013 14.0% 12.0% 10.0% 8.0% 6.0% 4.0%

    OVERALL NET T RENTAL RATE

    OVERALL V VACANCY RATE

    LEAS SING ACTIVIT TY VS. OVERA LL NET ABSO ORPTION


    6 6,000 sf (thousands)
    2 530 2,530

    2,711

    2,565

    573

    450

    0
    -3,481

    -2 2,000 -4 4,000

    2009

    2010

    -1,006

    2011

    2012 2

    YTD 2013

    LEASING AC CTIVITY

    OV VERALL NET ABSO ORPTION

    Thalhim mer 11100 W W. Broad St. Glen Allen, VA 23060 www.cu ushmanwakefield.c com/knowledge

    For more m information, contact: Brad McGetrick ctor, Brokerage Se ervices Direc 804 697 6 3558 brad.mcgetrick@thalhi imer.com

    The market terms and definition ns in this report are based on n NAIOP standards. No warranty or resentation, express or implie ed, is made to the accuracy o or completeness of the information repr cont tained herein, and same is submitted subject to errors, omissions, change of price, rental or othe er conditions, withdrawal wit thout notice, and to any spec cial listing conditions imposed d by our princ cipals. 20 013 Cushman & Wakefield, Inc. All rights reserved.

    140

    2 2,000

    4,470

    4,013

    4 4,000

    RICHMOND, VA
    SUBMARKET CLUSTER INVENTORY OVERALL VACANCY RATE 1.3% 10.6% 10.4% 11.3% 9.6% YTD LEASING ACTIVITY UNDER CONSTRUCTION YTD CONSTRUCTION COMPLETIONS 0 500,000 0 0 0 YTD DIRECT NET ABSORPTION 500 14,338 445,671 61,290 (379,204) YTD OVERALL NET ABSORPTION D Downtown Northeast Northwest Southeast Southwest 1,086,304 14,885,639 25,408,446 17,331,427 49,756,932 0 22,002 86,393 155,313 186,612 0 0 311,370 0 0 500 14,338 445,671 61,290 (381,649) $0.00 $3.69 $3.25 $3.89 $3.14 MF $0.00 $2.57 $4.19 $3.95 $3.98 DIRECT WEIGHTED AVERAGE NET RENTAL RATE* F $4.95 $9.11 $8.16 $6.73 $6.70 GI $0.00 $4.81 $5.22 $3.66 $3.56

    TOTALS
    PROPERTY TYPE

    108,468,748
    INVENTORY

    9.9%
    OVERAL VACANCY RATE 12.8% 7.2% 16.7% 11.0%

    450,320
    YTD LEASING ACTIVITY

    311,370
    UNDER CONSTRUCTION

    500,000
    YTD CONSTRUCTION COMPLETIONS 500,000 0 0 0

    140,150
    YTD DIRECT NET ABSORPTION 379,498 34,325 (23,942) (249,731)

    142,595
    YTD OVERALL NET ABSORPTION

    $3.52

    $3.72

    $7.84

    $4.31

    Q1 2013 Distribution Manufacturing Flex General Industrial 21,605,785 29,102,964 10,684,118 47,075,881 138,898 51,790 96,276 163,356 311,370 0 0 0 379,498 34,325 (23,942) (247,286) $3.52 $3.72 $7.84 $4.13

    2012 $3.55 $3.64 $7.81 $4.18

    DIRECT WEIGHTED AVERAGE NET RENTAL RATE* 2011 2010 $3.82 $3.51 $7.89 $4.21 $3.81 $3.51 $7.77 $5.80

    TOTALS

    108,468,748

    9.9%

    450,320

    311,370

    500,000

    140,150

    142,595

    $4.15

    $4.16

    $4.15

    $4.26

    * RENTAL RATES REFLECT ASKING $PSF/YEAR

    D= DISTRIBUTION MF = MANUFACTURING F = FLEX

    GI = GENERAL INDUSTRIAL

    MARKET HIGHLIGHTS Significant Q1 2013 Lease Transactions


    2801 Cofer Road 4810 Eubank Road 5701 Eastport Boulevard SUBMARKET Jeff Davis Corridor Airport Airport SUBMARKET Airport Scotts Add/West End Rt 288 Corridor SUBMARKET I-95 N/Mechanicsville SUBMARKET I-95 North/Ashland TENANT Full Service Warehouse & Logistics, Inc. Bermuda Distribution Best Bully Sticks BUYER Swift Air Logistics Jacque Street LLC SLW, LLC MAJOR TENANT NA MAJOR TENANT Vitamin Shoppe BUILDING CLASS B A A PURCHASE PRICE / $PSF $1,454,250 / $23.63 $1,200,000 / $23.75 $1,375,000 / $53.92 COMPLETION DATE Q1 2013 COMPLETION DATE Q2 2013 SQUARE FEET 230,000 92,857 90,000 SQUARE FEET 61,552 50,528 25,500 BUILDING SQUARE FEET 500,000 BUILDING SQUARE FEET 311,370

    Significant Q1 2013 Sale Transactions


    500 Trampton Road 4128 Jacque Street 3701 Price Club Boulevard

    Significant Q1 2013 Construction Completions


    10999 Air Park Road

    Significant Projects Under Construction


    Vitamin Shoppe Distribution Center

    Thalhimer 11100 W. Broad St. Glen Allen, VA 23060 www.cushmanwakefield.com/knowledge

    For more information, contact: Brad McGetrick Director, Brokerage Services 804 697 3558 brad.mcgetrick@thalhimer.com

    The market terms and definitions in this report are based on NAIOP standards. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. 2013 Cushman & Wakefield, Inc. All rights reserved.

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